msme

1. Micro, small and medium enterprises in Haryana
Prepared by : bhupinder kaur
Department of commerce
s.D .college, ambala cantt

2. Meaning and definition( MSME)
ACT,2006
Classification of
enterprises
Manufacturing enterprises
( investment in plant and
machinery)
Service enterprises(
investment in
equipments )
Micro Upto to rs 25 lakh Upto to 10 lakh
Small More than 25 lakh and upto 5
crore
More than 10 lakh and
upto 2 crore
Medium More than 5 crore and upto 10
crore
More than 2 crore and
upto 5 crore

3. MSME ( AMENDMENT) BILL 2015
CLASSIFICATIO
N
MANUFACTURIN
G
SERVICE
MICRO UPTO 50 LAKH UPTO 50 LAKH
SMALL MORE THAN 50
LAKH AND UPTO
10 CRORE
MORE THAN 20
LAKH UPTO 5
CRORE
MEDIUM MORE THAN 10
CRORE AND
UPTO 30 CRORE
MORE THAN 5
CRORE AND
UPTO 15 CRORE

4. CHARCTERISTICS OF MSME
• Wide spread base
• Less gestation period
• employment provider
• Manufacturing engine
• Less capital oriented
• These are world famous
• MSME are largest exporters
• Skill oriented dynamic sector
• Complementary to large industries

5. Role and importance of msme
• Employment
• Equal distribution of wealth
• Decentralization
• Less pressure of population on agriculture
• Increase in production
• Need less capital
• Artistic goods
• Individual taste

6. Contd.
• Complementary to large industries
• Industrial peace
• Encouragement to cooperation
• Role in exports
• Use of local resources
• Less in production
• Increase in investment

7. CONTD
• Increase in gross domestic
product (GDP)
• Infrastructural development
• Best alternative in case of less
capital

8. Problems / challenges faced
by MSME
• Finance: The scarcity of capital and inadequate
availability of credit facilities are the major causes of
this problem.
• Firstly, adequate funds are not available and secondly,
entrepreneurs due to weak economic base, have lower
credit worthiness. Neither they are having their own
resources nor are others prepared to lend them.

9. • Raw Material: availability of inadequate
quantity,
• poor quality and even supply of raw material is
not on regular basis.
• Small scale units are thus forced to purchase
the same raw material from the open market at
very high prices.

10. • Idle Capacity: There is under utilisation
of installed capacity to the extent of 40 to
50 percent in case of small scale
industries.
• Various causes of this under-utilisation
are shortage of raw material problem
associated with funds and even
availability of power.

11. • Technology
• Moreover, they lack requisite resources to
update or modernise their plant and machinery
Due to obsolete methods of production, they
are confronted with the problems of less
production in inferior quality and that too at
higher cost.

12. • Marketing
• They are not in a position to get first hand
information about the market i.e. about the
competition, taste, liking, disliking of the
consumers and prevalent fashion.
• With the result they are not in a position to
upgrade their products keeping in mind
market requirements.

13. • Infrastructure
• There is inadequate availability of
transportation, communication, power and
other facilities in the backward areas.
• All these factors are going to adversely affect
the quantity, quality and production schedule
of the enterprises operating in these areas.

14. • Under Utilisation of Capacity:
• Large scale units are working for 24 hours a
day i.e. in three shifts of 8 hours each and are
thus making best possible use of their
machinery and equipments.
• Various reasons attributed to this gross under-
utilisation of capacities are problems of
finance, raw material, power and
underdeveloped markets for their products.

15. • Project Planning:
• These entrepreneurs do not attach much
significance to viability studies i.e. both technical
and economical and plunge into entrepreneurial
activity out of mere enthusiasm and excitement.
• They do not bother to study the demand aspect,
marketing problems, and sources of raw
materials and even availability of proper
infrastructure before starting their enterprises.

16. • Skilled Manpower
• A small scale unit located in a remote
backward area may not have problem with
respect to unskilled workers, but skilled
workers are not available there

17. • Managerial:
• Managerial inadequacies pose another serious
problem for small scale units. Modern
business demands vision, knowledge, skill,
aptitude and whole hearted devotion.
Competence of the entrepreneur is vital for
the success of any venture. An entrepreneur is
a pivot around whom the entire enterprise
revolves.

18. Contd
• Old methods of production
• High cost of production
• Competition with large scale industries
• Limited demand for artistic goods
• Lack of able entrepreneurs
• Lack of standardization
• Industrial sickness